When asked: "Could you live off the dole?", Ms Macklin told reporters at the Mercy Hospital in Melbourne: "I could".

Mr Bandt said the minister had clearly not listened to what welfare groups had been telling her.

He said for the minister to say it is possible to live on that amount was "an outrageous statement".

"Once you take into account your rent your bills, your food, there's not much change left over from $35 a day," he told reporters in Melbourne.

Greens deputy leader Adam Bandt says living on the dole is not living, it's barely surviving.

"There has been inquiry after inquiry, report after report saying this is an income that's below the poverty line, it's not really an income at all.

"I think the minister needs a first-hand experience of living off the dole and perhaps she will change her mind," he said.

The Greens say the allowance should be increased by $50 a week to help people on the allowance meet some of the most pressing expenses.

"One of the things that is immediately clear is that is you need planning and budgeting to make it work," Mr Bandt said.

Mr Bandt said he had the luxury of being able to return to his well-paid job and nothing he could do would fully put himself in the shoes of someone who lives on $35 a day.

But he wanted to do it to draw attention to the difficulties faced by those living on the Newstart allowance.

"The real issue is whether the dole is adequate in this country," he said.

But Housing Minister Brendan O'Connor defended Ms Macklin and the new policy, while slamming Mr Bandt.

''I think it's quite patronising to pretend that you can actually live the experience by living on the unemployment benefit or Newstart for one week,'' Mr O'Connor told Sky News today.

''Our efforts are better deployed in working out ways that we can get people off unemployment benefits and into work.''

He said the Gillard government understood it would be difficult to survive on $35 a day, but the policy was designed to get people into jobs in the long-term interest of families.

''It increases the likelihood of people participating in the workforce, acquiring the skills needed, so that they do not find themselves indefinitely unemployed; that of course would be a terrible tragedy.

''You do not want to see a child grow up in a jobless household; that has a long-term adverse impact not only on the parents, but on the children.''

Single mothers have reacted angrily at ''appalling'' and ''degrading'' comments.

Corinna Taylor, a 43-year-old Brisbane mother of two, who expects to be moved on to the new system and lose $90 a week, said the comment was ''appalling''.

''I found it quite degrading,'' she said.

Ms Taylor said the new arrangements will force her to seek charity help or family loans.

It will also force many single mothers to rort the system, she said.

''But I would challenge anybody to live on $35 a day and not in some way have to rort the system.''

The government's changes will put those in different circumstances in the same basket, she said.

''I now will live on the same allowance as my 19-year-old nephew, but he rents a room for $120 a week,'' Ms Taylor said.

Office manager Cate Flaherty, a single mother of two, agrees.

''As a single mother who has always worked part-time and raised polite, considerate children, I feel that I am now being treated as somebody who adds no more value to society than some junkie who sits on the couch all day,'' she said.

Ms Flaherty says her budget will now be cut by $230 a fortnight, almost double that of a non-working single mother.

''We've actually copped a bigger hit than non-working single mothers, and what's really bothered me is that they're saying it encourages people back to work, but they wouldn't be punishing the ones doing the right thing all along,'' she said.

''It's made it harder for me to work.''

Ms Flaherty said she felt ''gutted'' by Ms Macklin's comments.

''It makes you feel worthless to society when you're doing such an important job,'' she said.

''I should be a die-hard Labor voter, but I've put a boycott on Labor for the rest of my life.''

Parramatta single mother-of-two, Luana Barrett, 41, said she would like to see Ms Macklin survive on the Newstart allowance and take care of her eight-year-old daughter, Mikayla, who has attention deficit hyperactivity disorder (ADHD).

''She's more than welcome to come to my home, look after my daughter, drive my bodgie car to work and try to make ends meet,'' Ms Barrett told AAP.

A casual shop assistant, Ms Barrett broke down in tears as she described how her family would try to cope with the cuts.

''I don't think I can afford to send Mikayla to dance class this year.

''It's only $20 a week.... I don't know how I'm going to find that money.

''We suffer mentally (worrying about our finances), but it's the kids who will suffer the most.''

Terese Edwards, chief executive of the National Council of Single Mothers and Their Children, said Ms Macklin's comments had been greeted with "great dismay and distress" by single mums around the country.

"It has resonated as salt in the wound for these mums who are facing such an uphill battle," she said.

Ms Edwards said she went to her local supermarket in Adelaide on Wednesday morning to check prices and found $35 a day would be impossible to make ends meet.

She said if rent cost a single mum $28 a day, plus school bus tickets for two children, cereal for breakfast, cheese sandwiches for lunch, sausages and vegetables for tea, it came to nearly $54.

That was without fruit, toiletries or cleaning products, not to mention electricity, healthcare, clothes and the rest, Ms Edwards said.

"I think it would be wonderful for many politicians on all sides of government to walk a mile in the shoes of a single parent, who will be forced from already a modest amount to a completely inadequate amount."

Ms Edwards said poverty could lead to a sad and lonely life for children with even small treats like DVDs and popcorn unaffordable.

"They're the kids that aren't going on the school camps, they're the ones that don't have the right uniform, they have the out-of-date books.

"They are marked in the school yard as the poor kids," she said.

The sensitivity of Ms Macklin's dole remark became clear when a ministerial transcript issued just hours after yesterday's media conference described as "inaudible" the reporter's question and the crucial first part of Ms Macklin's reply.

Last night, her office claimed its recording had been affected by a revving car.

Three parliamentary inquiries, the OECD, the Business Council of Australia, former Treasury Secretary Ken Henry and even Employment Minister Bill Shorten admit the dole is inadequate.

A spokeswoman for Ms Macklin yesterday accepted full responsibility for the transcript omission.

Cassandra Goldie from the Australian Council of Social Service (ACOSS) said Ms Macklin would struggle to live on $35 a day.

"The minister's claim is extraordinary and it flies in the face of all of the other evidence,'' she told ABC Radio today.

"The evidence is clear - they are living below the poverty line and we as a country can afford to address that.''

Opposition Families spokesman Jamie Briggs said the government should focus on balancing its own books rather than lecturing single mothers.

"After five years of delivering record debt and deficits, the last thing the Gillard Labor Government should be doing is lecturing single mums on how to live within their means," Mr Briggs said in a statement.

"The Gillard Labor government is incompetent and untrustworthy - it can't even be trusted to get a ministerial transcript right.

"Plainly, it would be tough to live on the dole but the question to be answered today is why did Minister Macklin try to hide her answer?"

West Australian Greens Senator Rachel Siewert spent a week living off the allowance last year and said she found it impossible.

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